The CEO of the company that sought to buy the Hotel Niagara before the state announced its own purchase plan said a lack of available financing prevented him from completing the purchase.
“We couldn’t find a bank that was willing to fund a development deal of this size in downtown Niagara Falls,” said Matthew Shollar, CEO of Reception Hotels.
“There was just a total unwillingness to lend to a deal in downtown Niagara Falls.”
But Gary J. Coscia, CEO of Largo Real Estate Advisors, said he doesn’t detect a bias against Niagara Falls, just a bias against projects that don’t make financial sense.
“I think if you have a well-conceived project where the numbers add up, you can get financing,” Coscia said.
Shollar said his company intends to respond to the request for proposals for a Hotel Niagara redeveloper that is to be issued later this year by USA Niagara Development Corp., a state agency that intends to buy the hotel from JSK International Corp., of Ontario, for US$4.4 million.
Shollar’s company last year announced a US$27 million plan to buy and renovate the 92-year-old landmark hotel, turning it into a Radisson with slightly fewer than the 200 rooms it had when it was last occupied in 2007. The purchase price in that package would have been the same US$4.4 million that USA Niagara is paying.
The Niagara County Industrial Development Agency granted Reception an incentive package, but the deal never closed.
Shollar said that a local bank stepped away and that a local mortgage broker also failed to find a lender. He said he then turned to a national mortgage broker, who had finally managed to find a bank with some interest in the project before USA Niagara stepped in.
As far as lenders are concerned, “Niagara Falls is not looked at as a sparkling market,” said Shollar.
The Hamister Group, which has a contract with the city and USA Niagara to build a US$35.7 million, 128-room Hyatt Place hotel on Rainbow Boulevard, also has cited difficulty with financing in explaining why its project has yet to begin construction almost three years after it was approved.
Schoepflin said when the Hotel Niagara plan was announced March 23 that USA Niagara would be willing to sell the hotel to the winning developer for less than the US$4.4 million that it intends to pay.